Regional Economic Integration
Regional economic integration is the process whereby countries of a region operating to reduce or eliminate barriers to the international flow of products, people, or capital
Five Key EU Institutions
Five Levels of Regional Integration
Common Market
Economic Union
Customs Union
Political Union
Free-Trade Area
Benefits of Regional Integration
Greater Consensus
Political Consideration
Trade Creation
Employment Opportunities
Drawbacks of Regional Integration
Shifts in Employment
Loss of National Sovereignty
Trade Diversion
European Commission
Council of the European Union
Court of Auditors
Court of Justice
European Parliament
Remove barriers to trade among members, but each country has own policies for nonmembers
Remove barriers to trade among members, and set a common trade policy against nonmembers
Remove barriers to trade, labor, and capital among members, and set a common trade policy against nonmembers
Remove barriers to trade, labor, and capital, set a common trade policy against non members, and coordinate members' economic policies
coordinate aspects of members' economic and political systems
Elimination of tariff among member countries increase trade. Buyers can acquire goods and service more cheaply and have a wider selection.
Another potential benefits is easier to gain consensus on trade issues as opposed to working in the far larger WTO.
Regional integration can expand employment by enabling people to move from country to another country for work
Trade being diverted from a more efficient non-member nation to less efficient member nation because of the lower tariffs charged between member nations.
Industries requiring unskilled labor shift to less developed member nations. More developed member nations will attract skilled workers that can increase competitiveness.
Successive levels of integration require nations to surrender more sovereignty
Example: political union requires nations to give up a high degree of sovereignty in foreign policy
Legislative body of the EU. It is the ultimate controlling authority. No proposed legislation becomes EU law unless the Council votes it.
Debates legislation proposed by the Council. It acts as a consultative rather than a legislative body.
It is the executive body of the EU. Implementing EU law and monitoring member states to ensure they are complying with EU laws.
Audit EU accounts, implement EU budget, improve EU financial management, and report to citizens on the use of public funds.
EU court of appeals. One type of case heard is when a member nations is accused of not meeting its treaty obligations. Justices are required to act in the interest of the EU as a whole.